Volkswagen boss Herbert Diess barely escaped the fall several times, now the militant boss of the group has to give way to the younger prince Oliver Blume. The 63-year-old will be replaced on September 1 by Blume, who will also remain head of Porsche, a sports car subsidiary, the Wolfsburg-based carmaker announced Friday after a supervisory board meeting. The moment of change of management was particularly surprising. According to insiders, the impetus for the separation of Diess came from the Porsche and Piech families, who own VW, who repeatedly supported the Austrian in disputes with the powerful works council. It was also blamed for problems with the software subsidiary Cariad – at the heart of the planned conversion of the Wolfsburg-based car maker into a data-driven mobility provider was the boss’s case.
Diess often looked for confrontation
The former BMW Diess manager has been responsible for Volkswagen for a good four years. He argued many times with the works councils. His brutal transition to electromobility sparked quarrels with workers who were concerned about their jobs. Families have found things cannot go like this, several people familiar with the councils told Reuters. “That’s incorrect,” said one of them. He changed Volkswagen for the better. “But his communication is terrible.”
Diess’ impatient appearance on the supervisory board had previously alienated the heirs of Ferdinand Porsche, the developer of “Beetle”. Technical problems with the new Golf or the first major electric car model ID.3 have been added, the weakness of an important business in China and the delays in the development of Cariada. the list of management errors alleged by Diess grew longer. Automotive professor Ferdinand Dudenhöffer explained that the replacement of Diess also shows how much of a challenge the Software Defined Car is for traditional corporations. “Automakers are becoming tech companies like Google, Apple, Microsoft – or they are becoming dependent on the heavyweight of software.”
Volkswagen talked about a generational change. Blume is nine years younger than Diess. After a possible IPO for Porsche, which is scheduled for fall, he should also lead the two car manufacturers to a personal union. At Volkswagen in Wolfsburg – more than 500 kilometers from the sports car headquarters in Stuttgart – he should be fired by CFO Arno Antlitz, who will also be responsible for day-to-day operations as COO in the future.
“Oliver Blume has demonstrated operational and strategic skills in various positions within the group and in several brands,” said Hans Dieter Pötsch, chairman of the board. The 54-year-old has been running Porsche AG for seven years “with great economic, technological and cultural success”. Blume was promoted to the Group Management Board in 2018. The board of directors is counting on a new tone in the board and a more harmonious collaboration from it: “Blume should continue the transformation with the board as a whole – with a leadership culture that focuses on team thinking,” the statement said. Diess has repeatedly been accused of driving alone. At the end of 2021, the dispute with the works council could only be resolved with difficulty – already then Diess had to hand over power. Now that the family has distanced itself, the truce of that time has become obsolete, said another initiate.
Inventories are falling significantly
Employee representatives on the supervisory board welcomed the change of management: IG Metall boss Jörg Hofmann said Volkswagen must also remain a role model in society. Daniel Cavallo, head of the General Works Council, emphasized that all VW employees would have to be included in the conversion. “Today’s decisions contribute to this.” Investors were less optimistic: Volkswagen shares fell 2.6 percent towards the end of the trade.
The chairman of the Pötsch supervisory board, who heads the listed Porsche Automobil Holding, paid tribute to Diess’ group restructuring services: “He has impressively demonstrated the speed and consistency with which it can implement far-reaching transformation processes.” He said. “In doing so, he not only guided the company through extremely difficult waters, but also fundamentally reorganized it strategically.”
Diess himself drew positive conclusions. Under the title “Merry Christmas!” He said goodbye to factory holidays on Friday with a LinkedIn entry – without going into the details of the upcoming goodbye: “I am very pleased with our results in most areas of our business,” wrote Diess. Some prerequisites, such as chip replenishment, should improve in the second half of the year. “I have no doubt that we will continue to gain momentum in the coming months.”